Imperial Sugar Company Cultivates Strategic Growth

Many people – and you’re perhaps one of them – see sugar as a food ingredient or an everyday commodity. We tend to take sugar for granted.

Stir it in your coffee. Sweeten your tea with it. Sprinkle some on cake and cookies. Then, get on with the important things in life.

Sugar, however, is much more. Today, the domestic sugar business represents a huge industry, valued at more than $10 billion annually and employing an estimated 146,000 people across America.

Even with the industry’s size and stability, one question nags sugar business leaders: How to generate sustainable growth with something so ordinary?

Texas-based Imperial Sugar Company puts the question another way – and instead asks: How can you maximize the value of sugar to ensure total customer satisfaction?

This only makes sense since making and selling sugar—in any form – begins and ends with customers, and of course, their consumers.

To that end, Imperial Sugar Company President and CEO John Sheptor intends to maximize customer value and cultivate growth by:

• Partnering with customers to add value, differentiate Imperial, and solidify relationships.
• Enhancing Imperial’s sugar franchise profitability.
• Expanding participation in organic and natural foods and fair-trade channels.
• Growing presence and partnerships in Mexico, and maximizing the value of Imperial’s new cross-border joint venture.

Customers First and Always

Sheptor knows that growth in the sugar business is built on keeping customer commitments. And since Imperial Sugar is one of the largest and oldest refiners of pure cane sugar in America, with many relationships generations in the making, senior management and employees see building its business around customers as an imperative.

“Think of it as creating a clear line of sight,” Sheptor says. “We’ve completely aligned our retail, industrial and distributor sales to deliver quicker responses and tailored solutions to our customers. The result: better service to them and their consumers.”

Core or Essential Franchise Profitability

The second part of Imperial Sugar’s growth strategy – enhancing core or essential franchise profitability – calls for improved operational excellence to deliver higher quality products and services at lower cost.

This priority, however, was put to an unexpected and tragic test eight days after Sheptor took office, when an explosion and fire damaged Imperial Sugar’s Port Wentworth, Georgia, refinery and packaging facility. (The company also has production facilities in Gramercy, Louisiana; Ludlow, Kentucky; and at its headquarters in Sugar Land, Texas).

The refinery is in the process of reopening after more than a $200 million rebuild – with full capability expected to return this fall. The new refinery will redefine industry standards for worker and food safety, and production efficiencies.

Negotiations also are under way to form the Louisiana Sugar Refinery (LSR), a proposed joint venture with food giant Cargill, and a alliance of Bayou State sugar cane growers and millers. Together the partners will construct a state of the art sugar refinery in Louisiana.

The planned one-million ton capacity facility will share operational efficiencies with Imperial Sugar’s existing plant in Gramercy, cutting costs and boosting overall profitability.

With the completion of the Port Wentworth rebuild and the new LSR refinery, Imperial will own and participate in the two most modern and efficient sugar plants in the United States with new investments exceeding $300 million.

With new refining and packaging facilities the integration of Lean, Six Sigma and TPM manufacturing philosophies will be that more effective. Training and implementation of these excellence concepts continues.

Organic, Natural Foods Business

Increased profitability also is expected to come from Imperial Sugar’s third imperative – growth in the booming organic and natural food products market. The company increased its ownership to 50 percent in Wholesome Sweeteners, a joint venture with international food and agricultural products company Edward Billington & Sons (based in the UK).

Imperial Sugar expects to expand its already strong position in this increasingly popular sector. Featuring products like agave syrups and honey, Wholesome has grown at a compounded annual rate of 30 percent in the last seven years.

With demand for high-quality organic sweeteners climbing fast, there’s no reason to expect the growth of fair-trade certified products to slacken.

Since Imperial Sugar also has the option of acquiring the remaining 50 percent of Wholesome in 2010, the company is poised to see a potentially significant return from this targeted growth market.

Cross-Border Opportunities

A growing presence in Mexico completes the fourth and final strategic growth platform. With the start of free trade of sugar between the U.S. and Mexico in January 2008, Imperial Sugar has created a joint venture to capture cross-border opportunities.

Comercializadora Santos Imperial (CSI), is a collaboration between Imperial Sugar and Ingenios Santos S.A. de CV (Santos). It already has grown from three customers to now serve more than 110 industrial baking, confectionery and retail market customers – on both sides of the border.

In addition, CSI has signed a marketing agreement with the Machado group, a long-standing sugar family based in Mexico to represent two of their mills. The combined potential capacity available to CSI to sell from Santos and Machado production could reach 650,000 tons depending upon crop conditions or 12% of the Mexican industry.

“This is an unprecedented achievement in Imperial Sugar’s long history. It points to how our multi-dimensional strategy will drive growth,” says Sheptor.